Joint Study between Deposit-Based and Money Transfer-Based Stablecoins

Hokkoku Bank, Digital Platformer, and JPYC have commenced a joint study aimed at enabling the purchase of “JPYC,” a money transfer-based stablecoin planned for issuance by JPYC, using “Tochika,” a deposit-based stablecoin issued by Hokkoku Bank through Digital Platformer’s technology. This collaboration seeks to expand the use of stablecoins across various fields, including payments and remittances.

Background

Hokkoku Bank and Digital Platformer have been promoting the use of “Tochituka,” a digital regional currency service that utilizes blockchain technology. This service targets businesses that have avoided adopting cashless payment systems due to high transaction fees, as well as regional gift certificate programs that still rely on paper-based issuance. “Tochika,” Japan’s first deposit-based stablecoin, can be used at Tochituka member stores, enabling cashless payments at a transaction fee of 0.5% (tax included), which is among the lowest rates internationally.

Digital Platformer is preparing to register for an Electronic Payment Business license to maximize the potential of transactions using stablecoins in the future. JPYC develops and operates “JPYC,” a Japanese yen stablecoin issued and circulated on a public blockchain. The company launched the prepaid-type “JPYC” in January 2021, and as of January 2024, the cumulative issuance amount has exceeded 2.5 billion yen.

Following the amendment of the Payment Services Act in 2023, JPYC is working towards obtaining licenses for Money Transfer Business and Electronic Payment Agency Business with the goal of promoting the issuance and circulation of the money transfer-based stablecoin “JPYC,” which falls under electronic payment instruments.

Future Plans and Outlook

This joint study aims to enable the purchase of JPYC’s planned money transfer-based stablecoin “JPYC” using Hokkoku Bank’s deposit-based stablecoin “Tochika”. This will expand the use of stablecoins in various fields, including payments and remittances.

As a future prospect, the partners aim to realize the exchange of various electronic payment methods that will be handled on a stablecoin exchange that JPYC plans to establish. This will enable transactions with electronic payment methods not only within Japan but also overseas, reducing both time and fees, and aiming to provide a more convenient service for users.

About Deposit-Based Stablecoin “Tochika”

The “Tochituka” app, a blockchain-based digital regional currency service jointly provided by Hokkoku Bank and Digital Platformer, allows the use of “Tochika”, Japan’s first deposit-based stablecoin issued by Hokkoku Bank.

By registering a bank account for charging on the Tochituka app, a Tochika account is opened. Once opened, users can charge their account from the registered bank account. One Tochika is equivalent to one yen, and it can be used for payments at Tochituka member stores. Member stores can also introduce cashless payment systems at a transaction fee of 0.5% (tax included), which is one of the lowest rates internationally.

About Money Transfer-Based Stablecoin “JPYC”

The money transfer-based stablecoin “JPYC” is an electronic payment instrument that can be exchanged with Japanese yen at a rate of 1 JPYC = 1 yen. Since public blockchain technology allows remittance fees to be kept as low as less than 1 yen, regardless of whether the transaction is domestic or international, remittances can be sent to recipients regardless of geographical distance. Furthermore, because there is no need for merchant management, anyone can freely use it as a payment method with no transaction fees at a wide range of locations, including online shopping and physical stores.

In addition to various on-chain services combined with smart contracts, JPYC has the potential to be used in a wide range of ways in the future, such as receiving salaries and rewards, and withdrawing cash through ATMs. Therefore, JPYC is expected to be used as a future financial infrastructure in various ways.

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